Boost Juice, Reject Shop bosses and other business chiefs reveal their financial advice for Millennials

Well-known Australian bosses have revealed the financial advice they would give to their younger selves, and some of their answers might surprise you.

Millennials that are looking to take control of their finances must get serious and set some savings goals including avid interest in their superannuation.

Given the fast-paced and expensive world of today, we asked some Australian bosses what financial advice they would give to their younger 25 year-old self.

Saving money and buying a home featured high on the list for many, plus ensuring a healthy nest egg for retirement.

Reject Shop chief executive Andre Reich says the advice he would give his younger self would be to set a personal asset target over a number of years, underpinned by annual actions and target.

“Ideally, the asset could be one where you can personally add value to improve it’s worth such as a business or property. Avoid overcapitalising on assets or experiences that’s typically depreciate,” he says.

Reich also says “work hard and be a good person”.

WORK HARD

Janine Allis, who started Boost Juice in her mid-30s in 2000, is more relaxed, suggesting Millennials spend and enjoy, noting most are still working out what they want to do.

“Forget about savings as many in their 20s (there are exceptions) really are working out their lives. Life, if you are lucky, is long and there is time enough for knuckling down and budgeting,” says Allis, who has overseen the business expand to 580 stores across 13 countries.

But if you’re looking to get serious about money, Allis says get into the property market.

“For those unique 20 something that have their financial heads screwed on the right was and really want to know how to do it, I would say this. Money is cheap right now and it may never be at these levels (again),” she says.

“The best non-taxable asset you can get is your own home, so get a small block of land with a little house on it and renovate it. This is a forced saving and mostly the money you put into will come back to you at some point and it will come back tax free.”

GET PROFESSIONAL FINANCIAL ADVICE

Reserve Bank of Australia board member Carol Schwartz, who set up an aerobics and dance studio at 25, says get professional financial advice.

“I was aware enough to know what I didn’t know, so employed an accountant to advise me on how to structure my fledgling business – remuneration for staff, payment of rent, how to do the bookkeeping, etc. It was money well spent,” she says.

Financial Planning Association of Australia chair Marisa Broome

“So I would advise any young person either setting up a business or taking on a salaried role to get good, professional financial advice – it can and will save you time and money as you embark on what is hopefully going to be a successful and satisfying career.”

Vogue Australia editor-in-chief Edwina McCann recommends taking control early of your finances and “get into the property market”, noting she wished she had bought a property sooner.

“I also would say learn about share trading. Try to understand how the finance system works or how the personal wealth system operates so that you can take more control of that as you get older,” McCann says.

Reserve Bank of Australia non-executive director Carol Schwartz. Picture: David Geraghty

McCann also says take interest in your super and making sure it’s not “languishing in different accounts” as you move jobs.

“With blockchain technology, we should be able to own our financial data, and I think that’s a really important thing that we should be pushing for.”

Marisa Broome, chair of Financial Planning Association of Australia, says Millennials face such a different world now but the fundamentals are the same.

“My kids are 24 and 26 and they’re just finishing university and getting their first jobs and doing those things at the moment, and the world that they face is so different than the world I faced at 25, it’s faster, it’s more expensive.”

“There’s all sorts of things that are really challenging but the fundamentals are the same,” she says.

PARENTS HELPING LONGER

Broome, who owns wealthadvice.com.au and is a certified financial planner, says her dad taught her that every time she earnt some money to put away 10 per cent of her gross earnings into a so-called “savings bucket” for either a car or house.

“Some months if there was a more urgent goal, I’d save a bit more if I could. But the really hard discipline is when you get a pay rise is to keep actually putting money aside,” she says.

“In those first few years you often get big pay rises, so it’s really important to keep living on less and not just using up all this extra money that‘s coming your away.”

Broome says her son and daughter are still living at home “so they’re saving so much more because we pay for everything still”.

The Reject Shop CEO Andre Reich.

She also talks to her kids about having short, medium and long-term goals and having “buckets of money that go with that”.

“Long-term for a 25-year-old is super. People are not engaged with super and it’s such a shame because it’s really easy to be, you don’t have to do much to be involved in that long term super stuff you just have to make sure you’ve got the right fund, you’re investing in the right option within that fund, and whether or not you need insurance,” she says.

TRACK SPENDING

Macquarie Group’s head of deposits and payments Olivia McArdle says it comes down to two things, understanding where you are spending your money and having clearly defined savings goals.

“By being clear on this, it will allow you to understand what you need to do to get where you want to be,” McArdle says.

“By tracking your spending habits you can get a really good feel for where you can or need to cut back, it can be an eye opening experience but you should know where your money is going,”

McArdle says it’s important to have goals and milestones while saving, be that for a house, a car or another investment as it “helps to keep you disciplined and on track, particularly as you move closer to that goal you’re working towards”.

“Think about opening multiple savings accounts for different savings goals so that you stay organised and can clearly see how you’re tracking,” McArdle says.

Originally published as Boost Juice, Reject Shop bosses and other business chiefs reveal their financial advice for Millennials